RTTNews - There is a further scope for cut in lending rates and as the business confidence gets restored, the Indian economy may recover swiftly, the Reserve Bank of India governor D Subbarao said at a conference.

The transmission mechanism of the monetary policy has been weak in India but it had not collapsed completely, he noted. The governor urged banks to bring down lending rates further in response to the RBI's monetary measures.

Unlike China, India is not a demand constrained economy. Once global recovery takes place, the country's growth would be swift and sharp, he said. The challenge lies in implementing the fiscal stimulus measures rigorously, he added.

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